Community Resilience Economic Decision Guide for Buildings and Infrastructure Systems

Abstract

This Economic Guide provides a standard economic methodology for evaluating investment decisions aimed to improve the ability of communities to adapt to, withstand, and quickly recover from disruptive events. The Economic Guide is designed for use in conjunction with the NIST Community Resilience Planning Guide for Buildings and Infrastructure Systems, which provides a methodology for communities to develop long-term plans by engaging stakeholders, establishing performance goals for buildings and infrastructure systems, and developing an implementation strategy, by providing a mechanism to prioritize and determine the efficiency of resilience actions. The methodology described in this report frames the economic decision process by identifying and comparing the relevant present and future streams of costs and benefits-the latter realized through cost savings and damage loss avoidance-associated with new capital investment into resilience to those future streams generated by the status-quo. Topics related to non-market values and uncertainty are also explored. This report provides context for increasing resilience capacity through focusing on those investments that target key social goals and objectives, and providing selection criteria that ensure reduction of risks as well as increases in resilience. Furthermore, the methodological approach aims to enable the built environment to be utilized more efficiently in terms of loss reduction during recovery and to enable faster and more efficient recovery in the face of future disasters. KeywordsBenefit-cost analysis; buildings; communities; constructed facilities; resilience; economic analysis; economic decision tool; life-cycle costing; natural and man-made hazards; present expected value; resilience; risk assessment; vulnerability iii iv PrefaceSince 2002, the U.S. has endured seven of the 10 most costly disasters in its history, with Hurricane Katrina and Superstorm Sandy topping the list. There is a need for best practices for resilience planning that address the increasing value-at-risk of U.S. infrastructure and communities. Communities, as a system, are particularly vulnerable to the effects of natural and human-caused disruptive events. There are best practices for community resilience assessment methodologies; however, there are gaps that remain in characterization of robust, benefit-cost measures of community resilience, especially in the planning process. In many cases, resilience remains in a planning silo and is considered separately by communities from economic growth or disaster risk planning. Efforts to increase resilience capacities are best realized when resilience is considered as an attribute in general community planning efforts, especially in planning and implementing building and infrastructure projects.Despite significant progress in the application of science and technology to disaster reduction, communities are still challenged by disaster preparation, response, and recovery. Although the number of lives lost each year to natural and ...

The Economic Decision Guide Software (EDGeS) Tool: User Guidance

“…This process is overviewed in the NIST EDG (Gilbert et al 2016). EDGeS makes the process of determining net-benefits from potential community resilience plans straightforward by walking the user through the process.…”

“…A planning horizon-the period of years over which resilience plans are assessed and are compared in terms of costs and benefits that occur during that period-needs to be selected for the analysis (Gilbert et al 2016). …”

“…This screen and input options in EDGeS is discussed further in Section 5.4. Improvement in performance includes both reductions in the magnitude of damages (e.g., to property and livelihoods) from a disaster and in the costs of the response and recovery phases (Gilbert et al 2016). Benefits (including avoided losses and costs), like costs, may be classified by their cause and to whom in the community it accrues, including: direct, indirect, response/recovery cost reductions, and non-economic.…”

Defining the resilience dividend: accounting for co-benefits of resilience planning

“…Field 21 The need to address non-market valuation for contributing benefits and costs to the extent possible is acknowledged (e.g.,NIST 2016). It is also the case that constraints on social dimensions of resilience goals may not be monetized, in which case they can contribute to defining the goals and objectives, which in turn confine the set of possible plans assessed in a BCA (Gilbert et al 2016). work and the collection of primary data is increasingly prominent in economic research, especially in behavioral economics. Use of this technique may prove useful in learning about pathways for co-benefits that are not apparent in datasets and garnering information about the relative importance of non-market contributors to co-benefits.…”

“…The series of case studies presented in Rodin (2014) center around a conceptual discussion of the resilience dividend having two potential components: (1) the difference between how a disruptive incident and the associated shock or stresses may affect a community that has made resilience-related investments compared to the counterfactual of the community not making such investments; and (2) co-benefits that investing in resilience can yield to a community, such as job creation, social cohesion, and equity. As articulated in the NIST Community Resilience Economic Decision Guide (EDG), the first element is traditionally included as part of a BCA, as avoided losses (Gilbert et al 2016). The second is the focus of this paper.…”